After a couple years of watching the satellite TV market semi-closely, I have to admit I have no idea where it's going or how quickly. Some time ago I had satellite figured as the key victim of the rise of telco IPTV, and later as a victim of its own lack of flexibility in a fiber-infused, multi-play service world. At other times, I thought the cable TV companies would head off satellite competitive progress at the same pass where they were stealing telephony customers from the telcos. None of that has happened.
That is not to say that satellite TV providers DirecTV and Dish Network haven't had a wild ride the last couple of years. Both had their ups and downs with AT&T before the telco giant chose DirecTV as its sole satellite partner at the beginning of this year. Both at times have been affected by cable TV competition responding to satellite's aggressive marketing. Meanwhile, Dish has been embroiled in a patent fight with TiVo, and lost many thousands of customers after losing the AT&T partnership. DirecTV has been hounded by speculation about its future leadership and its future ownership.
Yet, the second quarter of 2009 found both birds still flying high and, if anything, poised to fly higher. After a tough period, Dish added 26,000 customers on the quarter, while DirecTV dwarfed that figure by adding 224,000 customers. Meanwhile, DirecTV also reportedly is looking at the TV Everywhere model to get into the online TV game. The keys to satellite TV success have always started with aggressive marketing, but the companies also have been quick to embrace new offerings, like HD, DVRs and perhaps soon online TV and targeted ads. They also have often excelled where others companies have been slow to lay fiber.
The satellite companies aren't perfect, of course, as DirecTV saw its profit fall for the quarter and acknowledged that consumers aren't spending what they used to on premium services.
Still, the satellite guys are in the thick of the fight, and not burdened with any concerns about the future of voice telephony. I don't know how much longer they can continue as stand-alone service providers, or how long it will be before the telcos' other TV plays push their satellite partnerships into the background, but I've been saying that for a while, and it's obvious the satellite guys don't share my sense of uncertainty about where they are headed. Either that, or they're just enjoying the flight.
Satellite TV firms kept acquisitions at bay last year
AT&T ultimately went with DirecTV as its partner
IPTV players have not taken customers from satellite